This week, Wealth Professional reported on PMAC’s response to the proposal that the Canadian Securities Administrators (CSA) and Canadian Council of Insurance Regulators (CCIR) developed to provide total cost reporting for investment funds and segregated funds. Victoria Paris, PMAC’s senior legal counsel, said PMAC wanted total cost reporting to be done in percentages rather than dollar figures, so clients had true comparators between products.
Pereira responded that he’s challenged PMAC on its position in forums, and the Financial Planning Association of Canada has also made a submission making the same point that he is during the CSA-CCIR consultation process that recently ended. He said it noted that statements needed to disclose all of the fees paid to the dealer and advisor to be truly transparent about the costs.
“1.5% sounds a lot better than $15,000. That’s what it comes down to. Right?” said Pereira. “I just used a million dollar call. So, you’re a client, then, ‘what’s 1.5%? That’s acceptable. But, what’s $15,000? Let me stop and think about this for a second’. Because that’s what’s going on. Right? Frankly, people should stop to think about it. That’s the reality of it.”
Pereira noted that he includes both metrics on his client statement, but PMAC’s stance reflects a larger issue in the industry.
“All financial service industries are based on trust, and everything we do to build trust actually increases the size of the pie for all the players. Why? Because people who are apathetic to financial institutions and choose, instead, to trust themselves versus no one else, the more trust that we can create, the fewer of those people exist,” he said.
